Dispatches from the Frontier
Musings on Entrepreneurship and Innovation
Friday, April 28, 2006
Miniaturizing Venture Capital
Musings on Entrepreneurship and Innovation

Miniaturizing Venture Capital
On April 25th, VentureWire Alert reported the following:
The movement to miniaturize fund sizes has claimed another convert as W.R. Hambrecht & Co., the San Francisco-based financial services firm, has launched a $50 million venture capital fund with partner Geneva Ventures...This focus on early stage software deals is similar to the approach taken by other new funds such as Alsop Louie Partners, Global Reach Ventures and Greycroft Partners LP.
Bill Reichert of Garage Technology Ventures anticipated the trend toward specialization, capital efficiency, and the VC as network orchestrator more than three years ago in a Pioneer Entrepreneurs-sponsored conversation:
It's clear that Reichert believes venture capitalists will differentiate themselves by their orchestration skills, their ability to "accelerate the network" of portfolio companies. In his view, the VC's involvement with a company will be less about the basics of corporate organization and more on "providing leverage."
With our Product Capitalist® model, my EIP colleagues and I are pushing the envelope of fund miniaturization by focusing on consumer product innovations that leverage the manufacturing, marketing, and distribution capacities of existing companies.